Employee Engagement

Know The Real Value: Engaged vs. Satisfied Employees

We all know that engaged employees are the Holy Grail.  Companies where employees are engaged are more profitable (5X in fact!), report higher NPS scores, and decreased annual voluntary turnover. But lately, we’re seeing words like employee satisfaction and employee engagement used interchangeably, and the truth is that there key differences between the two terms. Satisfied employees are generally happy with their job functions and the compensation they receive for their effort. They can be assets who are valued contributors to your organization. Overall, they’re content with their jobs. There may not be necessarily anything inherently wrong with content or satisfied employees per se since they can still meet your expectations and perform well within the confines of their job function. A 2015 study conducted by the Society for Human Resources Management (SHRM) found that approximately 88% of U.S. employees reported overall job satisfaction.

So as an HR leader you may be asking yourself, “Which metric do I value the most, engagement or satisfaction?”

Let’s dig into the difference between satisfied employees and engaged employees. Engaged employees, as opposed to satisfied ones, exert discretionary effort, which is performance that exceeds the basic job expectations. Essentially, it is extra effort that can mean the difference between closing a sale, retaining one more satisfied customer, or creating a breakthrough innovation.

The difference between #Engaged employees and Satisfied employees? Discretionary effort

Discretionary effort is a core trait of an engaged employee. An engaged employee goes above and beyond their job duties because their personal goals are aligned with the ones set by your organization. They exert the discretionary effort to see that both their personal and the organization’s goals are met. In other words, their thought process isn’t solely “What’s in it for me?”

Back to the aforementioned 2012 SHRM study, the results indicated that although a commanding majority of polled individuals considered themselves to be satisfied with their jobs, the same pool only reported moderate levels of engagement. In fact, another study conducted by Gallup shares that only 30% of employees are engaged at work. This is because of notable differences in key factors. Satisfied employees tended to place very high value on their job security and the financial stability of their organization. On the other hand, highly engaged employees ranked the nature of the work itself and relationships with others as most important. Though there were some other valued factors that were shared by both satisfied and engaged employees, the variation in responses highlights the disparity between the two types of employees.

Employee engagement isn’t simply an aspirational goal.  There is a real business impact on metrics such as employee turnover, performance, and customer satisfaction. Gallup found that actively disengaged employees cost the U.S. economy upwards to $550 billion dollars annually!

The late Steve Jobs captured the essence of an engaged employee with this quote:

“If you are working on something exciting that you really care about, you don’t have to be pushed. The vision pulls you.”

The alignment of that vision is what creates the extra effort that drives motivation and great results. Imagine if your entire team was comprised of engaged employees. These are the stellar performers who consistently challenge themselves, strive to raise the achievement bar, and inspire others to do the same. Your dream team could pave the way in redefining success for your entire organization!

The million-dollar question now is: “What can I do to inspire engagement among my employees?” While the concept of engagement may seem ambiguous (after all, it’s not as if someone marks off a checkbox identifying as an engaged employee), engagement can be fostered in a few steps: finding the right fit, growing passion, and inspiring others to do the same.

Finding the right fit is all about identifying the right person for the right role at the right time. For example, even though your Marketing Manager is knowledgeable about your products, can he articulate a genuine passion about them with your customers? Many organizations emphasize with their employees the necessity of having the appropriate level of training and skill but do not routinely assess if the employee is the right fit for the position. Ask yourself: Is the employee being challenged enough? How is the employee developing his or her skill set by this role?

What does growing passion mean? Unfortunately, employee development is too often used synonymously as job skills training. Employee development should be so much more! It should incorporate a memorable alignment to the organizational vision, a clear understanding of one’s role in the pursuit of that vision, and an ongoing open feedback channel between employees and leadership on the direction of the organization. It’s not just the opportunity to connect with others in a shared vision, but it’s an invitation to partner and collaborate together with others to achieve that vision. The growth of passion starts at the top of the leadership ladder, and it’s the responsibility of leadership at each level to effectively instill this passion with each employee.

Lastly,  employee engagement is meant to be contagious. Engaged employees inspire others to join in. Be creative and leverage the strengths of these individuals to raise the collective bar for all members of your team. Make team goals that are challenging yet attainable, and reward them in a meaningful way once the challenge or goal is achieved. Promote a fun culture that celebrates performance milestones. Highlight the unique traits of each individual of your team and tie them into how they contributed to the overarching vision of the organization. Invest in the advancement of engagement within your team.

In the dynamic and competitive world of work, organizations can no longer afford to retain employees who are simply satisfied with their jobs. Too much opportunity is lost when a discretionary effort is absent. Instead, organizations must cultivate a work environment where engagement can be inspired, can thrive, and can be sustained. More specifically, leaders must find the right fit for each employee within their team, create a culture where organizational alignment and communication can occur, and inspire members of their teams to continue the trend. Only then will employee performance be maximized and the organizational vision fully realized.

This article was written by friend of Blueboard Dr. Ren Hong. Ren is an independent leadership coach and engagement consultant who works with business leaders to drive their HR strategy and maximize their team’s performance. He is available for consultation and speaking engagements. Reach him at

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